Let’s dive a little deeper. Once you start paying attention to those critical metrics, you’ll want to work to improve them.
If customers are walking away and they won’t refer you, you’ll want to stop the bleeding.
If they think you’re the best, you’ll want to press your advantage.
And if we find ourselves in the middle, let’s get better.
Improving Customer Lifetime Value
You recall that CLV has three main components—
- How much a customer spends in their transaction(s) with you.
- How many transactions a customer has in a given time period (month, quarter, year)
- How many of those time periods that customer remains a customer
Some organizations include profit in the equation. If that makes sense for you, great, but with or without profitability you still have three customer levers you control.
To increase average spend per transaction, think about your sales strategies and consider how well your customers know your offers. Sometimes a simple, “Would you like a scone with that today?” delights a customer and gets a little more in your register.
Purchase incentives like coupons, buy-on-get-one half off, or bundles can tease out a little extra spend. Recommendation engines do a great job of this for online shoppers, as does free shipping if a particular order-size threshold is reached. (When I have over $50 in my basket for Imperfect Foods, I start looking for ways to get free shipping with a $60 order.)
Education can drive more frequent transactions. A 3C client looking to sell more bags of flour provided delicious recipes to drive more frequent usage; a tax services firm instituted an annual planning meeting with their account rep to remind their contacts of additional tax-preparation services they provide to growing companies—a chance to build relationships and find out how expansion had increased a client’s tax footprint.
To help customers want to stay customers longer, understand their customer journeys. Study all the ways they interact with your organization, from product discovery to evaluation, from purchase process to support engagement—you’ll increase empathy and that will help you remove any satisfaction blockers at each customer touchpoint. And how will you measure that? By asking the Net Promoter Score question after completed tasks, monitoring those results, and working to improve them!
Improving Net Promoter Score
The first trick to improving net promoter score is to ask the NPS question. A lot.
- “How likely is it that you would recommend this company to a friend or colleague?”
Each customer can have many “journeys” to interact with your organization, both modalities and tasks/goals
- Modalities include web, both PC and mobile browsers, an application if you have one, phone calls, retail or office locations, your reps at their location, and so on
- Tasks/goals include learning about your organization and products/services; exploring and comparing your offerings against each other and against competition; the purchase process in all its forms from web (and does the interface and experience differ across modalities?) to Requests for Proposal, Statements of Work, and Purchase Orders; to after-purchase support; even leaving reviews or getting help from finance to find a lost invoice.
At each of these points you can survey on the experience and how it affects the customer’s likelihood to recommend working with you. And what do you do then?
I know professional services firms who have executives call customers who give detractor-level scores (7 or lower). Companies that have automated the NPS process can follow up with email, or even branching logic that launches a “we’re sorry to hear that, tell us more” message—so long as it leads to follow up.
The best companies study responses, figure out where the most dissatisfaction lies, perform root cause analysis, then get to work fixing what’s wrong. This can mean streamlining processes, updating interactive voice response scripts, adding bots to websites, and changing behavior among the workforce with training, maybe even hiring practices.
And then you can get proactive, listening to customers before they experience trouble. More on that in our next post!